Federal government human resources (HR) leaders are sending a clear message: modernizing workforce management is no longer optional. According to new research from MeriTalk and Workday, inefficiencies tied to outdated government HR systems are significantly hindering Federal mission success and draining nearly $1 billion in productivity annually.
The new study – Future-Ready Feds: Modernizing Human Capital Management to Empower Government Service – is based on a survey of 100 senior HR decision-makers across Federal civilian agencies and the Department of Defense.
The findings reveal widespread reliance on legacy technologies and manual processes that limit visibility, introduce compliance risks, and delay critical workforce decisions. In fact, 89 percent of HR leaders say outdated systems are directly impeding mission execution, estimating they spend nearly half of their time each week correcting errors and navigating system limitations.
“The Federal government is at a crossroads,” said Lynn Martin, Chief Growth Officer Government at Workday. “Legacy systems waste the two most vital assets of government – employees’ time and taxpayers’ dollars. Federal HR systems must embrace modernization, not only to improve efficiency but to empower agencies to make data-driven decisions that enhance service delivery, customer satisfaction, and mission success.”
Despite overwhelming consensus that modern workforce management is foundational to effective public service, modernization remains a low priority across many agencies. While 96 percent of HR leaders believe modernization is critical, only 48 percent say it is currently a high priority at their agency.
Moreover, 83 percent report lacking a clear roadmap for transformation, with many pointing to misaligned vendor offerings, a lack of interagency collaboration, and complex compliance requirements as barriers to progress.
The research highlights key areas where technology could deliver immediate impact. HR leaders estimate that more than 60 percent of their current processes could be at least partially automated – from workforce data accuracy to skills mapping and employee engagement efforts.
Modern workforce analytics also represent a missed opportunity: less than half of HR leaders can easily access foundational workforce data such as employee counts, retention rates, and performance trends. Another 52 percent lack clear visibility into contractor roles and redundancies.
Leaders are also warming to the idea of common operating environments. Nearly all – 98 percent – say they would support shared HR services if implemented thoughtfully. AI-driven skills matching, centralized recruiting, and standardized personnel actions emerged as top opportunities to streamline operations and boost hiring efficiency. Those shifts could help agencies reduce redundancy, respond more quickly to mission needs, and better align talent strategy with long-term goals.
According to the report, addressing HR system limitations could save the government nearly $1 billion annually in regained productivity. But to realize that vision, HR modernization must be elevated as a mission-critical IT priority – not just a back-office upgrade.
To accelerate progress, the study calls on agencies to invest in cloud-based digital HR platforms, prioritize workforce analytics, and embed zero trust security principles in HR IT systems. Leaders must also coordinate across agencies to streamline services and improve data sharing while addressing regulatory requirements.
Ultimately, modern HR systems are not just about improving efficiency – they are foundational to building a resilient, agile Federal workforce.
To access the full report, visit: https://www.meritalk.com/study/future-ready-feds-modernizing-hcm-to-empower-government-service/